The Duty Of Disclosure In Insurance Law

The Duty of Disclosure reflects the Utmost Good Faith in Insurance Law. The Duty of Disclosure in Insurance Law means there is duty on the part of the disclosure obligor to disclose to the insurer the material facts. The aim of the Duty of Disclosure is to help the insurer to get risk information on the insurance object. Those information would influence the particular insurer in deciding to issue the policy of insurance at all, or to issue it only at a particular level of premium. The duty of disclosure is very important to perfect insurance market and to protect the interests of the insured. Being a judge, the author notices the Duty of Disclosure has already been a conspicuous issue in insurance dispute. High rates of fail in the suit for the party insuring made the author understand the necessity and importance for studying the Duty of Disclosure in insurance.The Duty of Disclosure originates from marine insurance in 18 century. At that time, the disclosure of the obligor was almost the only way for the insurer to get risk information of the object. So there were strict rules on the obligor to fulfill his obligations by the law. With the development of science and technology, as well as mature insurance market, the insurer' s ability to get the risk information to control the risk and to operate insurance industry is getting stronger and stronger. The burden of evaluating the risk should be redistributed. There should be more limits to the insurer by the law when the obligor breaks the Duty of Disclosure.In the paper, with the method of economic analysis of law, theInterpretation of Comparative Law and Hermeneutics, the author tries to elaborate the tenets of law on the Duty of Disclosure, the parties and content of the Duty of Disclosure, the time period and the way to fulfill the obligation, the essential factor and aftereffect for duty violation. Finally, aims at some debated issues come from judicial practice, the author makes some suggestions to further perfect the duty of disclosure system in the country in order to protect interests of all parties (particularly to the party insuring).There are seven chapters in the paper. Chapter one is about the tenets of law on disclosure. In this part, the sources and definition of the Duty of Disclosure are introduced, the author analyses the nature, economic method of the Duty of Disclosure and to compare it with the Utmost Good Faith and explanation obligation. Chapter two is about parties of the Duty of Disclosure. Compared with other types of contracts, parties of insurance are more complicated. The insurance contract parties are the party insuring and the insurer. Besides, the insured and the beneficiary are the related partied parties. Insurance attorney and broker, as well as physical examination doctor are the assistant parties of insurance. The author analyses relationships among those parties with the Duty of Disclosure. As far as the obligor of the duty of disclosure is concerned, the majority of the domestic scholar thinks the insured should assume the duty of disclosure. But in contract law theory, the author thinks when the insured and the party insuring are separated, the insured is not the party to assume the duty. Chapter three is about form of the Duty of Disclosure. There are two forms of disclosure in the world. The burden of evaluating the risk should be redistributed in modern society. Aims at the reality of the insurance marker in the country, the author analyses the questionnaire in detail. Chapter four is about the content of the Duty of Disclosure. The author thinks the content of disclosure should be understood in subjective and objective way. That means the content would be 'material facts' in objective and 'to know or have reason to know forobligor' in subjective. Chapter five is about the time period to fulfill the obligation, which would affect the interests of contract parties directly. Suspension recovery of validity renewal of a policy and modification could happen during performance. Link with the judicial practice and insurance practice, the author discusses how to fulfill the duty of disclosure under those circumstances. Chapter six is about the essential factor of disclosure breach, which is the core issue of the Duty of Disclosure System. To counter with the content of disclosure, the essential factor of the Duty of Disclosure should be analysed in subjective and objective way. The author considers only with the fault in subjective and act in incumbency violation, the obligor would be considered to go against the Duty of Disclosure. The author discusses the relationship between infringement and insurance accident. Chapter seven is about the aftereffect for incumbency violation. There are two theories to explain the aftereffect, Invality Doctrine and Discharge Doctrine. The country adopts the latter. The author elaborate how to execute the right of discharge from the following aspects: the time period of execution of discharge the aftereffect of execution of discharge and the defense cause. The author also discusses the incontestable clause in life insurance. Finally, the author makes some suggestion to further perfect the Duty of Disclosure System in the country.